According to the GVH’s investigations, retail is not the culprit in price increases.

By: Trademagazin Date: 2025. 08. 11. 12:41

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It is not the retail trade that is responsible for the rapid price increase of milk, dairy products and eggs experienced at the beginning of 2025, but rather supplier prices – this is revealed by the results of the investigations conducted by the Hungarian Competition Authority, which have only been published as drafts for the time being. The GVH concluded that supplier prices jumped mainly due to the increase in labor costs, the increase in overhead costs and the increase in product fees. These effects apply to all other food producers and processors.

The Hungarian Competition Authority recently subjected two product groups to a comprehensive rapid analysis in order to gain an idea of the price movements characteristic of the food market. In both product groups (milk and dairy products and eggs), the authority concluded that the rapid increase in consumer prices experienced at the end of 2024 and the beginning of 2025 was clearly due to the increase in supplier prices.

In the field of milk and milk processing, supplier prices increased due to factors such as rising raw material costs (raw milk) and rising labor costs, rising overhead costs (energy, water, sewerage fees), and the extended producer responsibility fee (EPR), which was mostly incorporated into consumer prices through the increase in packaging and packaging material prices.

Examining the prices of milk and dairy products, the GVH also states that the retail margin has decreased significantly since mid-2023 and stabilized at a level below 20 percent, which reduced profits in all product groups or made the distribution of the given product unprofitable even before the introduction of the margin cap. According to the GVH, consumer prices for eggs also largely followed the increase in supplier prices. According to the GVH, income relations in the value chain have shifted towards the producer and processor levels, and the margin freeze has turned retailers into losses, which is difficult to sustain in the long term.
According to the National Trade Association (OKSZ), this in itself justifies the early elimination of the margin freeze (now planned for the end of August), because it does not reduce inflationary pressure, it only masks it. Labor costs, utilities and EPR costs have increased in all areas related to food, along with many other cost factors. These costs are passed on by producers and processors to retailers: the GVH also found that suppliers are increasingly demanding contract modifications from retailers who buy from them.